Is crisis necessary for change?

While it can be invigorating to hear stories of how organizations overcome crisis, we started to wonder: why does crisis tend to be such a common motivator for change? What implications might a crisis have on the changes effected, and how might that crisis affect an organization in the short and long term? In this post, Gail Crider and Sunny Widmann share their experiences and ideas about how crisis impacts change, for better or worse.

 

Sometimes, but it’s risky.

Crisis generally means loss of strategic perspective, with organizations becoming overwhelmed by what is dead ahead and incapacitated by the chaos of the situation. Crisis can exacerbate organizational dysfunction, deeply dividing people within an organization and the organization from its community. But amidst all that can go wrong, sometimes crisis is the only way to right an organization because crisis can present a fulcrum point for significant change to a seemingly intractable set of circumstances.

My work in our early stabilization program gave me the opportunity to observe many organizations in cities across the US and how well they prevented or responded to crisis. Not all crises experienced by these groups resulted in the organization closing or becoming one of the “walking dead.” One film group survived and was the stronger for it because they had a solid board-executive relationship. Together, they recognized the true cause of their crisis and addressed their problems head on. It was painful, time consuming and resource stretching but they restructured the organization. They overcame board and operational hurdles and retired a large debt. This group was more the exception than the rule.

Others weren’t so skilled in navigating crisis to make changes necessary to ensure their success. Take the case of one mid-size symphony that experienced crisis on a seemingly cyclical basis. These cycles were punctuated by financial shortfalls that eroded the balance sheet over time (lack of quality data). The board rotated through executive directors, each time thinking that surely this new CEO would right the organization, rather than recognizing and remedying the chronic problems that had lead them down the same path many times. The periods immediately following crisis points did see a sense of connection and support between the CEO and the board; increased donations; and some relief to the difficult relationship among the musicians, senior staff and board, but none of these were sustainable over time.

Another example of how crisis can inhibit positive, sustainable change rests in an educational theatre company where the crisis exacerbated organizational dysfunction. Crisis deepened factions within the staff and board. Strategy discussions were overshadowed by the grind of day to day cash management and survival discussions, and trust with the community and key funders was destroyed. This organization closed their doors.

My experience working with these organizations confirmed my belief that several key factors can make the difference between a well-functioning and crisis-attracting organization, including:

• clear focus and agreement on a strategy that was relevant to both the mission and the environmental context for a given span of time (generally speaking this timeframe sits at two to three years),
• the degree to which they were externally focused and constituent-oriented rather than inward-looking,
• the nature and quality of relationships between staff and board leadership and the degree to which disconfirming information could be brought forward and heard without the fear of retribution,
• the quality and type of data used to make decisions, and
• a commitment to actively manage change.

Why do some organizations create or manifest crises and what makes a difference in terms of sustainable change if they make it through a crisis? The answer may depend on how many of the above factors come into play.   Ω

 

Not only is it not necessary, it’s detrimental.

Some leaders report that a crisis is the only real way to move people towards change in an organization, but I believe that major change can happen incrementally. In my experience, some crises not only fail to motivate major change, they may also slow progress altogether.

As a Peace Corps volunteer in the 600-person village of Ati Atovou, Togo, I failed. A lot. Try a new way of teaching students about reproductive health? Fail. Organize an all-women soccer league in the district? Fail. Though these mistakes dealt quite a blow to my 22-year old ego, I persisted, remembering the wise words of Samuel Beckett: “Ever tried. Ever failed. No matter. Try again. Fail again. Fail better.” Each misstep meant that I was inching closer to getting it right.

One of the projects closest to my heart was working with the village women’s association to start a savings and loan cooperative – a first for Ati Atovou. The prospect of saving up to pay medical bills or taking out a loan to start a small business was exhilarating for group members, but risky since it meant entrusting what little cash they had to the care of their neighbors. If a member took out a loan and failed to pay it back, other members would lose a portion of their savings. In a collectivist culture such as ours in Ati Atovou, trust was crucial to success.

Launching the initiative was an iterative process of designing, encountering problems and rethinking. Initially, we had the frequency of meetings wrong, resulting in low attendance and too few contributions. We also had to move to a more simplified and transparent accounting practice as we learned that the members had different levels of education and experience. While these small hurdles and subsequent tweaking amounted to our eventual success, I believe that a large failure would have meant the end of our project. It was crucial to make small improvements before reaching the point of crisis because I knew that we would not be able to move forward once confidence in each other was broken and we would have lost the possibility of achieving our mission. We would not be able to rebuild the savings and loan association, nor would the women be likely to join a similar cooperative in the future.

Furthermore, a crisis would have had consequences for neighboring villages’ savings and loan organizations. News of one failed initiative incites fear and people are less likely to take the risk of joining. If news surfaced that a fellow Peace Corps volunteer serving in a nearby village experienced a crisis in their work, it would be very difficult to refute the possibility of a similar situation happening in my own projects.

Similarly, I wonder how a crisis at one cultural organization here in the U.S. might affect another’s ability to build a relationship with the community. When a theatre company declares bankruptcy, what implications does that have for other arts organizations, locally and nationally? How does it change the way potential donors consider their gifts?

Real change can happen over time if leaders are attentive to the small details and aren’t afraid to modify a failing practice before it snowballs into a full-blown crisis.   Ω

 

Where some see crisis, others see opportunity. Sunny and Gail’s stories illustrate how crisis can be a catalyst for change or lead to an organization’s downfall. Avoiding a crisis, or successfully managing one should it arise, requires keen awareness and a solid understanding of the key factors that can help make the difference between an opportunity from a potentially disastrous event.